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Disconnect Found Between Leadership Development Perceptions, Practices

More than half of senior leaders responding to a survey anticipate their companies’ performance will soon suffer because they don’t have the right talent in place, according to a recently released report from the global consultancy Development Dimensions International (DDI).

“Leaders see the opportunity, they talk about it, they invest in it, but this is a job that requires their direct involvement, and most just aren’t skilled or experienced at doing it themselves,” said Matt Paese, DDI’s vice president of executive solutions. “It’s astounding given the fact that they recognize the business impact of having the right people—yet they’re outsourcing accountability for it.”

The findings are based on a survey of 412 senior leaders in Europe, North America, Asia and Australia conducted by the Economist Intelligence Unit on behalf of DDI in late 2007. To complement the quantitative findings, eight executives were interviewed on their perceptions of talent management.

Eighty-five percent of respondents said that talent management is as important as—or more important than—other business priorities. Still, only 20 percent of leaders said they often spend time managing talent, and only 10 percent said they review it often with their board of directors.

“Many leaders don’t recognize that their involvement in talent management initiatives could turn the tide for the organization,” Paese said. “It’s a missed opportunity for those leadership teams.”

Half of the leaders surveyed said their organizations are doing sub-standard work in developing their leaders, and more than half said they were fair or poor at identifying talent. In addition, 60 percent of organizations are not satisfied that talent is growing fast enough to meet their most critical business needs.“

This is dramatic, because this tells us that leaders are grading themselves poorly on the two most fundamental elements to growing talent—identifying and developing leaders,” Paese said.

Getting Hands Dirty, Feet Wet

CEOs and other senior leaders have an opportunity to set the tone for the entire organization through their own involvement. Yum! Brands Chairman and CEO David Novak says he sees talent management as his responsibility and focuses on it continuously “because every opportunity is a chance to coach, develop, share what you’ve learned with somebody else, get a perspective on somebody, assess their potential and assess their development needs.”

“Any time I go into a meeting, I’m always looking at the people and thinking about what I can do to develop them, improve their skills, give them the coaching they need,” Novak said.

The executives surveyed said their greatest obstacle to executing business strategies well was not having the right person in the right job. For some organizations, this means not making the right promotion decisions. For others, it’s not having enough talent ready to move into critical roles.

“This suggests that while organizations fully recognize the criticality of talent management, they are often not prepared to replace leaders who are not executing effectively,” Paese said.

Among the recommendations noted in the report for rectifying this situation:

Define what it will take for the company to succeed globally within the next three to five years. Determine whether the company has enough leaders with the right capabilities to tackle these challenges. If not, determine how best to identify those with the greatest potential and accelerate their development. Then decide how to measure talent growth.

Craft and integrated talent strategy. Adopt one comprehensive strategy that requires senior leaders to serve not only as executive sponsors and champions of the strategy but also as active participants in the development and growth of talent.

Instill ownership of talent management at all levels of the organization. Establishing accountability and cultivating skill development among frontline and mid-level management also are essential to sustaining ownership and ensuring long-term growth.

Identify leader potential early on. Recognize that less-experienced leaders with high potential do not become ready overnight. It’s essential that organizations identify talent early, before the urgent need arises, by scanning routinely for and isolating leaders who are showing a combination of strong performance and leadership potential. Once identified, provide these leaders with heightened access to key learning experiences and developmental support to accelerate the organization’s readiness for business challenges.

Build a strong HR function. In the survey, only one in 10 respondents said HR was doing an effective job of bringing in outside candidates. Bringing the HR agenda and its stakeholders into the boardroom is an essential element of successful talent management. This implies a healthy tension between senior leaders, who rightly should hold HR accountable for their guidance, and HR leaders, who should rightly hold senior leadership accountable for owning the organizational goals associated with talent growth.

Take risks and be innovative about executive development. Conservative approaches to leadership development yield little to no change. True talent growth requires that learners experience the excitement of new challenges, new ways of thinking and the risk of occasional failure. With the appropriate support, these risks can pay off and translate to new leadership capabilities.

Theresa Minton-Eversole is editor of SHRM Online’s Organizational and Employee Development content area.